Bank Rating Criteria

Our scoring algorithm provides a broad measure of Local Impact - how well banks contribute to the health of

the local economies. Utilizing a user defined locale -- a fixed radius with a default of 5 miles from a given origin point -- we apply scores to banks based on seven criteria: 1) Small Business Lending, 2) HQ Location, 3) Bank Branch Concentration, 4) Ownership Type, 5) Bank Size, 6) Small Farm and Agricultural Lending, and 7) Speculative Trading. We then aggregate scores and rank banks according to their impacton the locale, either Strong ★★★ (5+), Moderate ★★ (1 to 4), or Weak ★ (-2 to 0).

Bank and Credit Union report data is retrieved from the FDIC, FFIEC and NCUA at:

Small Business Lending

Rating

Criteria

Score

Outstanding

20% or more of Total Assets

3

Significant

10 to 20% of Total Assets

2

Moderate

5 to 10% of Total Assets

1

Insignificant

Less than 5% of Total Assets

0

Why?

Invest in Main Street

Small Business Lending is vitally important to the Main St. economy. Small, locally owned businesses are the backbone of our economy and our communities, and they depend heavily on banks for their financing needs. Small businesses make up the majority of new jobs in the economy and they help build strong communities by sustaining vibrant town centers and linking neighbors in a web of economic and social relationships. When you deposit money or buy a CD at a bank that is committed to small business lending a much larger percent of your dollars is invested in your community.

HQ in Locale

Rating

Criteria

Score

Yes

In Locale

1

No

Outside Locale

0

Why?

Where do descision makers live?

If management lives locally it means they better understand local needs and care more about how their decisions affect the community. Local HQs also means more dollars are recycled back into the local economy in form of employee salaries and bank vendor purchases from other locally owned businesses.

Branch Concentration

Rating

Criteria

Score

High

Greater than 50% of Branches in Locale

2

Medium

Between 10% and 50% of Branches in Locale

1

Low

Less than 10% of Branches in Locale

0

Why?

Location, location, location!

Bank Branch locations provide an indication of where banks focus their business. A high concentration of branches in a single locale is a strong indication of a bank's commitment to the local market.

Bank Ownership

Rating

Criteria

Score

Coop or Mutual

Credit Union or Mutual Savings Bank

1

Stock

Shareholder Owned Bank

0

Why?

Whose interests are being served?

Credit Unions and Mutual Savings Banks have greater accountability to their depositors. Credit Unions are non-profit cooperatives and depositors elect their board of directors in a democratic one-person-per-vote system. Similarly, Mutual Savings Banks do not have capital stock and are typically owned by their depositors.

Bank Size

Rating

Criteria

Score

Small

Total Assets less than $1 Billion

2

Medium

Total Assets between $1 and $10 Billion

1

Large

Total Assets between $10 and $100 Billion

0

Giant

Total Assets greater than $100 Billion

-1

Why?

Size Matters

Small banks tend to operate as "relationship brokers" basing credit decisions on local knowledge and nonstandard data obtained through long-term relationships. Small businesses, particularly new companies, may be unable to satisfy the requirements of the more structured transactional approach to underwriting that larger banks use. Smaller sized banks tend to be owned or controlled by members of the community. Larger banks or those publicly traded on a major exchange are subject to outside pressure, institutional and absentee investors. The largest banks, the "Too Big To Fail" banks, leverage their enormous size to peddle influence in Washington distorting the democratic process.

Small Farm Lending

Rating

Criteria

Score

Yes

Small Agricultural Lending Assets greater than 1% of Total Assets

1

No

Small Agricultural Lending Assets less than 1% of Total Assets

0

Why?

No Farms, No Food

The benefits of small-scale agriculture include healthier food, a cleaner environment, and a more diversified economy. Locally grown food is fresher and more nutritious, it reduces second-hand consumption of fossil fuels, supports resposnible land development, and honors our agrarian heritage.

Speculative Trading

Rating

Criteria

Score

Yes

Trading Account Assets greater than 1% of Total Assets

-1

No

Trading Account Assets less than 1% of Total Assets

0

Why?

Support Productive Investment, not Speculation

Are your deposits being reinvested back into your community or are they being funneled to the Wall Street gambling casino? Banks that "Trade on Account" use deposits to speculate on derivatives and other securities that have little to do with the real economy. The focus of banking should be long-term investment in real businesses resulting in the creation of good jobs and the production of useful goods and services.